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Notes from Monitoring Board meeting

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02 Apr 2010

The IFRS Foundation Monitoring Board met with the Trustees of the IFRS Foundation at the IASB's offices in London on 1 April 2010. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the meeting. The Monitoring Board met the IASC Foundation Trustees in London.

Meeting of the IFRS Foundation Monitoring Board, 1 April 2010, London
All Monitoring Board members were present, except for the Chairman of the IOSCO Emerging Markets Committee (Guillermo Larrain). However, Greg Tanzer, the IOSCO Secretary-General, represented him. The Meeting was chaired by Hans Hoogervorst, Vice-Chairman of the IOSCO Technical Committee.

The meeting was relatively brief, taking just over an hour of the 2.5 hours allocated.

IASCF governance and independence

Michel Barnier, the European Internal markets Commissioner, reiterated the EC's support for IFRSs as the only realistic option for a single set of globally-accepted, high-quality financial reporting standards. However, there are continuing concerns in Europe over the governance of the IFRS Foundation and its accountability to public authorities and the IASB's engagement with investors and prudential supervisors. Mr Barnier was challenged on both points by the Foundation's Chairman, who noted that the Monitoring Board was put in place specifically to provide the engagement with public authorities, and its membership had been determined in consultation with the European Commission. In addition, in the past 12-18 months, the IASB had greatly expanded its outreach and investor/user engagement. Finally, on all major projects, the IASB would (as it had on IFRS 3) undertake impact assessments and produce feedback statements (summarising the results of the IASB's due process and redeliberations).

Consistency of application and enforcement

Mary Shapiro, Chairman of the US Securities and Exchange Commission, noted that IOSCO was heavily involved in efforts to promote comparability and consistency of application and enforcement of IFRSs. It was, necessarily, an ongoing and iterative process. Her comments were supported by Mr Tanzer and Ethiopis Tafara (US SEC) who noted that IOSCO is sharing information among its members (including the Committee of European Securities Regulators in the EU). This information sharing was designed to identify enforcement issues and application problems, with the view to making more informed enforcement decisions. In addition, the US SEC had bilateral relations with a number of IFRS jurisdictions through which they exchanged information with the aim of avoiding contradictory enforcement positions.

The Chairman of the Japanese Financial Services Agency called for IFRIC to be more active, issue more Interpretations and be more specific about the reasons why it does not take items to its agenda.

IASCF funding

On funding for the IASCF, Mr Barnier noted that it was very important that all IFRS jurisdictions make 'realistic contributions' towards funding the IASCF. He agreed to enter into bilateral discussions with the IASCF Chairman on the level of EU funding, but noted that both the European Council and the European Parliament had to agree the budget and be satisfied that all conditions for EU funding had been met on an annual basis. Ms Shapiro stated that the SEC was working hard to find both short-term and long-term funding solutions for the US-based contributions to the IASB. She noted that financial independence is one of the SEC's milestones for accepting IFRSs for US domestic issuers, and the SEC recognises its own role in helping the IASCF to achieve that.

Post-2011 Strategic planning

The Monitoring Board will look at how it operates, how it exercises its oversight functions of the IASCF, and how it conducts its business generally. It felt that, until all members had signed the Memorandum of Understanding, it had been premature to do this exercise.

The greater demands of emerging and transition economies in the post-2011 activities of the IASB were noted, both by an IASB Trustee and by Greg Tanzer on behalf of IOSCO.

IASB stakeholder engagement

The Monitoring Board noted the enhanced outreach activities of the IASB in the past 12-18 months with approval and hoped that sufficient funding could be secured such that those efforts could be maintained or enhanced further.

This summary is based on notes taken by observers at the Monitoring Board meeting and should not be regarded as an official or final summary.


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